This morning in the 743-seat basement theater of the Michael Schimmel Center for the Arts at Pace University, Jeff Bezos, president, chief executive and chairman of the board of Amazon, and Arthur Sulzberger Jr., publisher of The New York Times and chairman of the New York Times Company, unveiled a device they hope will save newspapers: The Kindle DX, which features a 9.7-inch screen designed for newspapers and textbooks. That’s 2.5 times the size of the original Kindle, which debuted in November 2007 and was updated in February 2009.

The Kindle DX, which can handle PDF files and can rotate like an iPhone, will sell on Amazon.com for $489.

“Wonderful!” Shouted Mr. Sulzberger, who seemed very excited.

Mr. Bezos, who late last week unloaded 200,000 shares in Amazon stock, according to the Pragmatic Capitalist, appeared before the crowd in loose-fitting jeans and a blazer, sans tie. Mr. Sulzberger was also casual in earth tones. He was missing his tie, as well.

Standing in front of a giant projection Steve Jobs–style (despite a few technical glitches—woops!), Mr. Sulzberger told the crowd that The New York Times,The Washington Post and The Boston Globe would be offered at reduced prices to readers who live in areas where home delivery is not available and who sign up for long-term subscriptions to the Kindle editions of the newspapers. He referred to this as a marketing test.

Additionally, 37 national and international newspapers would be made available on device with monthly subscriptions of $5.99 to $14.99 per month. Twenty-eight magazines, including Time, The New Yorker, The Atlantic, Forbes and Fortune, with subscriptions ranging from $1.25 to $8.99 per month, are also Kindle-ready.

Mr. Sulzberger called the Times Company’s embrace of the Kindle DX “an important milestone in the convergence of print and digital.”

“We at the New York Times company are delighted to make use of the Kindle DX,” Mr. Sulzberger continued. “We know that the e-reader can offer the same satisfying experience [as the print edition].”

One source at The Times said that the Kindle DX is held by some in the building as an answer to what’s been plaguing the news industry.

This isn’t the first time Mr. Sulzberger has been talking to executives about a new toy. Another source said that Hewlett Packard CEO Mark Hurd met with Mr. Sulzberger in the Times Building on the afternoon of April 14 to “discuss business” after Mr. Hurd had met with the Biz Day staff (and one Hewlett Packard person in the room also said that HP had met with Time Inc. execs in Palo Alto a few weeks earlier).

The Times—and other news organizations—has been looking forward to just such a device for a while. In January, The Times‘ David Carr put out a desperate plea in his Monday Media Equation column: Let’s Invent an iTunes for News. Mr. Carr cited a posting on TechCrunch in which Michael Arrington hinted at a breakthrough device on the horizon, “a large screen iPod touch device to be released in the Fall of ’09, with a 7 or 9 inch screen.”

Who could blame Mr. Carr for being excited about such a thing. (This paper was excited about the idea, too.) While it’s arguable that Apple’s iPod and iTunes Store furthered the music industry’s decline and chipped away at the integrity of albums by selling singles piecemeal, publishers and media workers desperate for something—anything—that can keep them afloat are waiting with bated breath for just such a device and a related revenue model.

Also in January, Business Insider’s Nicholas Carson crunched some numbers and determined that it would be cheaper for the New York Times Company to distribute Kindles to its subscribers than continue printing the paper every day.

On Monday, The Times‘ Brad Stone reported on a large-screen Kindle aimed at newspaper and magazine readers and the next day, Time‘s Josh Quittner brought word that Amazon’s Jeff Bezos and the New York Times Company’s Arthur Sulzberger would be presenting the new device, thereby “signaling some kind of partnership between the Times and Amazon.”